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Fear.  Fear of the unknown.  How many times do we have someone contact us, interested in improving their situation, the solution is presented to them… and they choose instead to wait?

Fear. Fear of the unknown.

Even when the facts are laid out, the option of pain and discomfort can be replaced with safety, security and peace of mind… but when Fear is present, paralysis isn’t far behind.

I try to help my clients be objective, which can be difficult with life changing decisions. Even when someone says “it’s all about the numbers”, I can tell you from having helped hundreds of families, after it’s all said and done, it’s those things that can’t be measured with a decimal point or a dollar sign have the greatest impact – safety, security and peace of mind. So simple, why do we shy away? Is it something in our makeup that has us programmed to try to maximize every opportunity? Are we still being measured by some unseen teacher or supervisor where the outcome has to be optimized, or we don’t move at all?

Fear. Fear of the unknown.

For so many today, the information world that surrounds us does little to bring the benefits one might imagine. News is so instant, so broad… we feel a tragedy from some distant corner of the country or globe as if it were right next door… the path of war seems to be almost at our doorstep daily… wildfires… a lost child… And then there is the market, stocks go up, stocks go down, we know we haven’t lost a dime until we go to cash out but oh how that ticker can color our mood with overtones that reach into our very psyche.

Let us pause and realize that life isn’t what we see printed on a balance sheet, life isn’t the sum of every issue from every corner… life is here, right now, it’s very real, and we have a choice.

Fear. Fear can be overcome. Simply. Easily. By education. By action. By knowing that we’re never going to be perfect, nor do we need to be.

Safety, security, peace of mind…  yes, it’s that simple.


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Time to stop the “blame game”…

Accusations have gone ‘round more than twisters in Oklahoma in the Spring time.  With plenty of blame no matter which way one points one thing is certain… we are where we are.  The Stock Market is in the tank, the Real Estate market has gone through far more than the “correction” that experts told us we were dealing with two years ago.  And the Banks… well, true, money has gotten tighter, but the real issue is that lenders got burned with lending to people who they knew going in had higher probabilities of defaulting… and to no one’s surprise, they did.  There is still plenty of money to borrow, but if you don’t have high credit and good income your options have vanished.

And what are we to do?  Well, as someone who as seen just about all that this economy can dish out after 50 years, Mr. Nicholas Caputo, retired President of Bank of America’s Trust division and former Vice President of Chase Bancorp tells us “…we’ve been through tough times before. Our salvation isn’t going to come from our leaders, it’s going to come from the same place that it has always come from, the strength and resolve of the American people themselves.”

And he’s probably right… let’s hope he’s right, the alternative isn’t a pleasant one.  But with every challenge comes the opportunity to learn.  We as a people are a nation of “non quitters”, of stumblers and fumblers who’s only difference between their success and other’s failures is that they simply did what it took, they picked themselves up yet again, they persevered, and they overcame.  We shall overcome…

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Can it get any better for the FHA HECM?

That is the question many in the mortgage industry, and many senior homeowners, are asking these days. After 20 years of near obscurity the FHA Home Equity Conversion Mortgage seems to be finally getting the due so well deserved.   Not the first choice for advertising budgets spent by mortgage lenders looking to maximize return on marketing dollars, and slow to shed the mantle of derision brought about by abuse of reverse mortgages of days gone bye, perhaps the stars have finally aligned for the safest mortgage in America today.

We are at a unique period in time where the awareness of the Government version of the Reverse Mortgage is at it’s highest.  Combine that increased visibility with a dramatic decrease in financial stability and you find that environment for a “perfect storm” of sorts, but instead of a storm senior homeowners today are finding a safe port in these unsettling financial times.

Also contributing to the growth in the FHA HECM are the recent passing of the Home and Economic Security Act of 2008 which brought with it an increase in the FHA lending limit to $417,000.00 and the limiting of certain fees charged the borrower.  And the current administration has leant this program a hand as well, the Stimulus Plan just signed by President Obama further raises the FHA lending limit to a new height of $625,500.00, great news for that select group of homeowners that have seen some of the most dramatic gains in home appreciation over the past few years.  As well with gains in property tax that quite sadly has lead many in this situation to sell their beloved homes because with their limited income in retirement, even with planning, they simply find it difficult if not impossible to keep up.

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Affordable Aging
Saturday morning at 8:30
on AM 880 KIXI Radio and streaming online at www.kixi.com
Hello, I’m Ted butler, your host for “Affordable Aging”.  I invite you to grab a cup of coffee, pull up a chair, and join me every Saturday morning when we’ll discuss the latest in government programs, insightful interviews, and information about the issues that are important to you and your family during these trying financial times.
We’ll have the latest in senior programs and services dedicated to help senior homeowners age in place with safety, independence, and the dignity we all deserve.
I welcome your input and suggestions for show topics.
 I’ll be talking with you!

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New legislation has positive effect on reverse mortgages

This law made a number of changes to the housing and mortgage industry. One item that was rarely discussed is the effect that HR3221 has on reverse mortgages.  This very important legislation has been in the works for almost two years now. This is positive for the industry and most importantly to homeowners considering reverse mortgages.

Reverse mortgages have come a long way since 1961 when Nelson Haynes of Deering Savings & Loan extended the first reverse mortgage to Nellie Young, the widow of his high school football coach. It was an act of kindness that today continues to offer a helping hand to seniors in need.

Over the years, reverse mortgages continue to improve with stricter regulations, oversight by the Department of Housing and Urban Development and the mandatory third party counseling to ensure that all borrowers understand the product before the loan process starts.  These and other improvements are helping families recognize that a reverse mortgage is a legitimate retirement tool.

The reality in this country is that our home represents the largest asset for most people. Even as real estate values decline from inflated highs, the median home value in Ventura County still exceeds $400,000. Given the tremendous wealth tied up in real estate and the continual rise in cost of living, a home must be considered as a tool to supplement retirement income.

We expect the changes for points one and two to be effective sometime between November 2008 and January 2009. The three key changes include:

Reduction in loan costs. Loan origination fees will be capped at $6,000, compared to $7,255 or higher today. Fees will be calculated at 2 percent of the first $200,000 of home value and then 1 percent of the value that exceeds $200,000. It is recognized that loan fees are a deterrent for reverse mortgage candidates and that these changes will help to alleviate this obstacle.  Often overestimated in the cost structure of these loans is the cost of comparable options to improve your cash flow.

Selling your home and downsizing may be a good option, but consider that real estate fees, closing costs, and moving expenses can cost you up to 8 percent of your home’s value.

Increase in cash available. The amount of money you receive is mostly based on age, interest rates and home value. In Ventura County if your home is worth more than $362,790, the value above this amount is not considered in determining your benefits due to current Federal Housing Administration lending limits. Whether your home is worth $370,000 or $600,000, current limits allow you to borrow only a percentage of $362,790.

The new law will increase the lending limit to $417,000 nationwide and up to $625,500 in areas that the FHA will define as “high cost.” The estimated impact will increase the dollars available to reverse mortgage borrowers between 15 percent and 70 percent depending on your home value and how the limits are implemented.

Purchase a home with reverse mortgage. For seniors looking to relocate or downsize, this feature will allow you to purchase a house without taking on a mortgage payment and without having to sink all of your cash into the house.  The idea of spending the rest of your retirement years making mortgage payments can be quite daunting.  Many times that cash can be used to help better afford cost of living increases, maintaining the house, and enjoying retirement in a way you had envisioned.

These changes represent the continuing road to making reverse mortgages as mainstream as your 401(k). As with any program, this does not work for everyone, but most people should at least understand the facts on how this program works. Our lives can change quickly and being prepared is the key.

— for more information contact Reverse Mortgage expert, Ted Butler, at

877-563-4247 or email him at ted@affordableaging.com


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